U.S., Allies Set Terms for Palestinian Aid

LONDON, Jan. 30 -- The United States, the European Union, the United Nations and Russia agreed Monday that financial assistance to the new Palestinian government, which will be led by the radical Islamic group Hamas, would be contingent on the government's recognition of Israel and renunciation of violence.

But officials, gathered in London following last week's resounding electoral victory by Hamas, appeared to avert an immediate showdown over money. Secretary of State Condoleezza Rice and U.N. Secretary General Kofi Annan said funding would continue for the current Palestinian government, which U.S. officials said could remain in power in a caretaker role for up to three months while the new Hamas-led government takes shape. Some officials had feared an immediate cutoff would destabilize the government.

Hamas immediately rejected the statement. The quartet, as the Middle East peacemaking group is known, "should have demanded an end to [Israeli] occupation and aggression . . . not demanded that the victim should recognize the occupation and stand handcuffed in the face of the aggression," Hamas spokesman Sami Abu Zuhri said, according to the Reuters news agency.

U.S. officials said they viewed the statement by the quartet as a clear international warning to Hamas a day before President Bush gives his State of the Union address. The statement also appeared to represent a compromise between U.S. officials and their European counterparts, who had been publicly skeptical of the hard-line approach advocated recently by Rice and Bush. Both have said in recent days that the United States would not give financial support to a government led by Hamas, which Israel, the United States and the European Union consider a terrorist group.

A senior Bush administration official said the quartet position reflected the reality that other donor nations -- the 25 member states of the E.U., for example -- have diverse laws and political positions about how to approach Hamas, formally known as the Islamic Resistance Movement. While U.S. law prohibits funding a group designated as a terrorist organization, other nations have more ambiguous legal constraints, the official said.

The United States and the Europeans have faced difficulty over how hard to prod Hamas to change its policies. The Palestinian Authority is teetering on the edge of collapse and a complete cutoff of aid might provide an opening for Iran to exert its influence. Rice stressed Monday that the United States is "mindful" of the Palestinians' humanitarian needs and that "everyone wants to see those needs met." Little U.S. aid currently goes directly to the Palestinian government.

Javier Solana, E.U. foreign policy chief, endorsed the call for Hamas to recognize Israel and renounce violence, saying, "Once these conditions are fulfilled, the European Union will stand ready to continue to support the Palestinian economic development and democratic stability."

Much of the Palestinian Authority's $1.6 billion annual budget comes from foreign donors. The United States gave $403 million for various Palestinian projects last year.

In Gaza City on Monday, Ismail Haniyeh, the top Hamas candidate in the parliamentary elections, said: "We are asking you to cooperate with our mission by keeping an open mind.

"We are asking you to respect these results and respect the will of the Palestinians."

At a news conference in London, Annan said the new Palestinian government must "ensure law and order, prevent terrorist attacks and dismantle the infrastructure of terror," as well as honor previous Palestinian commitments under a U.S.-backed peace plan.

On Sunday, Rice acknowledged that U.S. officials were surprised by the extent of the Hamas victory.

"I've asked why nobody saw it coming, and I hope that we will take a hard look," she told reporters, "because it does say something about perhaps not having had a good enough pulse on the Palestinian population."

She added, "I think what was probably underestimated was the depth of resentment of the last . . . decade of the corruption and the old guard and the like."

Correspondent Scott Wilson in Gaza City and staff writer Glenn Kessler in Washington contributed to this report.